prep question

jc114 · Posted: Mon May 07, 2007 3:29 pm Post subject: prep question

Connsumers in California seeking personal loans have fewer banks to turn than do consumers elsewhere in the US. This shortage of competion among banks explains why interest rates on personal loans in California are higher than in any other region of the US.
Which of the following, if true, most substantially weakens the conclusion above?

A. Because of the comparatively high wayes they must pay to attract qualified workers, California banks charge depositors more than banks elsewhere do for many of the services they offer.
B. Personal loans are risker than other types of loans, such as home mortgage loans, that banks make.
C. Since bank deposits in California are covered by the same type of insurnance that guarentees bank deposit in other parts of the United States, they are no less secure than deposits elsewhere
D. The proportion of consumers who default on their personal loans is lower in California than in any other region of the US
E. Interest rates paid by California banks to depositors are lower than those paid by banks in other parts of the US because in California there is less competition to attract depositors

In the passage, does the shortage of competition among banks mean that there is no competition? I am a bit confused

guynoor · Posted: Wed May 09, 2007 7:15 pm Post subject:

Is the answer A?

jc114 · Posted: Thu May 10, 2007 2:50 pm Post subject:

yes, the answer is A...could you explain for me pls?

jayhawk2001 · Posted: Thu May 10, 2007 9:14 pm Post subject: Re: prep question